Adam Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows.

Existing Equipment				Replacement Equipment
Cost	$	111,000		Cost	$	110,000
Operating expenses*		115,000		Operating expenses*		114,000
Salvage value		21,000		Salvage value		14,000
Market value		54,000		Useful life		9	years
Book value		36,000
Remaining useful life		9	years

*	The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the useful life of the equipment.

Required:

a.	Calculate the total relevant cost of existing equipment and the potential replacement equipments.